Maritime Launch Services is targeting May 1, 2018 to break ground and begin construction on Canada’s first commercial spaceport which would be based in Nova Scotia.
On Friday, November 3, 2017 I interviewed Maritime Launch Services (MLS) CEO Steve Matier. As you’ll hear in the podcast they are in the “final closing” of their Series A financing and already working on the next round. As Matier points out, this is a commercial project with no funding coming from either the Canadian or Ukrainian governments.
Matier has applied for a Canadian working visa and plans to relocate his family to Nova Scotia.
What was once just an idea is getting closer to reality, but there’s much more work yet to be done.
Note: This podcast was recorded before SpaceQ had confirmed that Canada and the Ukraine had signed an agreement to cooperate in space.
Steve Matier, CEO, Maritime Launch Services Interview Transcript
Marc Boucher: My guest is Steve Matier, CEO of Maritime Launch Services. Welcome, Steve, to the SpaceQ Podcast.
Steve Matier: Thank you. A pleasure to be here, very much.
Marc Boucher: You recently held your second open house in Canso to discuss the status of your project as part of your environmental review process. How is the environmental review proceeding? Any issues come up?
Steve Matier: The environmental review process is proceeding extremely well and on schedule. We started the provincial EA (environmental assessment), you know, last year, or earlier this year, rather, but started the data collection in February, which is required. You have to have four seasons of data collected as a part of that review process, all those results compiled into a report.
Part of that process also includes doing an open house to get input from the community and questions and what have you. And then there will be another open house that kind of displays all the results of the four seasons of data collection. We are on schedule to complete that report and get it submitted to Nova Scotia Environment here by the end of the year, the first week or two in January at the latest.
Marc Boucher: Okay. And from what I understand and earlier statements you made this year, once that environmental review process is complete, you are hoping to start construction in the Spring. Is that a realistic timeframe to begin construction? And I ask that because your company is the first of its kind to build a commercial spaceport in Canada, the regulatory process could take longer.
Steve Matier: The expectation is we, well the hope is rather that we can get through all the regulatory approvals in the set amount of time. For example, Nova Scotia has a 50-day review cycle as a part of their environmental assessment review. If that goes okay and they come out of that 50-day review cycle, I mean, there are three options. Obviously there is a reject, there is an accept, there is an accept with provisos.
So our hope is that we can get through that 50-day review cycle. They have a process called one window where all of these stakeholder agencies are going to receive this environmental assessment report, and they’ll all feed in their input into that, and we’ll have an outcome from that NSC review process.
We do have to follow that with the Crown Land lease process, Department of Natural Resources, and that process includes, of course, their acceptance of everything we’ve done as a part of the environmental review and a tender letter from them for the lease. We, at that point, have to get a formal stake survey and appraisal done, and then hopefully get that deal closed up and approved at their level, as well, at the senior level within the DNR.
But all those things laid, you know, end-to-end like that, it looks like if everything goes okay we can hit a May 1st ground-breaking.
Marc Boucher: May 1st? Oh, okay. That sounds good. I’ll have to make it out there for that. Much better weather than going, let’s say, in March.
Steve Matier: Indeed. Well, it can change day-to-day pretty rapidly. I’ve been out there in all seasons now, for sure.
Marc Boucher: So shifting a little bit here to the Ukrainian side of the equation, has any manufacturing begun on the Ukrainian Cyclone-4M launch vehicle? And how long does it take to produce and deliver one for you?
Steve Matier: The Cyclone-4M is going to be a hybrid rocket. Don’t get me wrong, not hybrid in terms of propellant, but hybrid in terms of its off-the-shelf components. The upper stage is and was manufactured as a part of the previous Cyclone-4M project, which was the joint venture between Brazil and Ukraine. That is essentially done. There is hardware, photographs, you know, a couple of complete sets of basically upper stages ready to go.
What we did though for the Cyclone-4M is to switch out the first stage with a LOX Kerosene. This is a medium class rocket, so we’ve got on the shelf a ready to go design for handling the medium class rocket, and we’ll use a Zenit second stage proven hardy engine that’s flown 60-something times, a hundred percent successful, into the overall structure for the Cyclone-4M.
So it’s more of an integration of parts. Some of them are already done, but the work that Yuzhnoye is doing right now is essentially all the design work for integration of these known quantity and proven heritage components into the vehicle itself.
So the straight answer is there is no hardware in manufacture. There has been some already made as a part of the former program that we get to leverage, and the other stuff will be manufactured for first launch, you know, after we get through this design, review, and integration process.
Marc Boucher: Okay. So in — there was other Ukrainian/Canadian news this week, and this was a news report that was published in a Ukrainian website, although it hasn’t been published in Canada yet, or confirmed in Canada. But this, according to this report, the space agencies of Canada and the Ukraine recently signed a memorandum of understanding to work together in Montreal. Were you aware of this? Do you have any thoughts on this?
Steve Matier: Well, I can certainly confirm it as I was present for it, and I actually have some photos on my phone I can share with you, if you would like …
Marc Boucher: That would be great.
Steve Matier: … that demonstrate the signing ceremony. We had the pleasure of being invited down by the Embassy of Ukraine to be a part of it. This is a part of a week-long of, you know, two or three days before that of meetings in Ottawa, and meeting with President Laporte at the Space Agency, Transport Canada, and a number of others. But we travelled by train Wednesday morning and caught the event Wednesday afternoon in Montreal. Prime Minister Groysman was there for the event, as well as Canadian Ambassador Waschuk, as overseeing the signature between President Laporte and Director Degtiarenko .
So, yes, it did occur. Yes, the focus of the entire event was about what the two countries can offer each other in this go forward collaboration. And Cyclone-4M was, you know, one of the two that were brought up from the Ukraine side as projects that are of the highest interest and most potential. And quite a bit of emphasis for this event was surrounding the Cyclone-4M and Maritime Launch Services participation in it.
Marc Boucher: All right. Well, I’m glad I got confirmation on that. Now, once construction begins optimally next May, what’s a realistic timeframe for the first launch? I know that I think you had originally hoped for a 2019 launch. Is that still the case and will it be a test article or will it actually carry a paying customer’s payload?
Steve Matier: At this point, we are looking at the Summer of 2020 for a first launch. There is a great deal of work obviously we need to do to get there with a solid 18-months of site construction and another six-months of commissioning. That’s why we are looking at a May 1st and what can follow from that for getting to a July of 2020 launch date.
Let’s see. So, you know, that part is going extremely well and I think that we’ll be able to make that date as it stands today if everything goes forward as planned.
We are open to and wanting to launch a payload aboard this first launch. Given the heritage of the Cyclone-2, Cyclone-3, and the Zenit families that we’re putting together on this thing, one is going to have to either fly a deadweight or fly a payload. And we do have some potential customers that are interested in that first launch.
Marc Boucher: All right. You had said that your goal was to launch up to eight payloads a year. That seems low to be commercially viable. Previously John Isella, your former CEO, said you were potentially interested in other launch providers using the spaceport. How many launches per year could the spaceport conceivably support per year going forward? And that is your customers and others who have signed on to use the spaceport facilities, whether it’s for orbital or sub-orbital.
Steve Matier: The potential from just the Yuzhnoye, Yuzhmash direction is they have a production schedule that they have shared with us that can deliver a launch vehicle every 29 days or so. So conceivably we could launch 11 to 12 rockets out of there. From investor perspective, return on investment perspective, we are extremely comfortable with making our, you know, customers and clients happy with eight launches per year, and we have certainly seen an interest in the market out there that would be able to fill that manifest.
You know, there is a potential for other launch vehicles to join into this process, and including sub-orbital sounding rockets, or what have you. But it really needs to be balanced against the community there.
One of the things that we have committed to with them is to, you know, honour their livelihood, which is primarily lobster fishing. So there is a 63-day period in May and June in that particular area of the province that the lobster fishing is going on, and these folks are out on the water every day, pulling up traps, dropping traps, and bringing in their lobster catches. And they are off the water by two or three in the afternoon, so we could conceivably do a late-afternoon launch, that kind of thing. But the real balancing act is our commitment to make sure that we are not upsetting the ongoing livelihood that are on, that are present there as we speak.
So could we increase our launch frequency? Yes. Could other folks be involved with launch vehicles? Yes. That isn’t part of our current track because it’s a matter of avoiding scope creep at this point. It is a commercial project.
I don’t want to get diversification in our plan here at this point, simply because we have got to get to that launch date. Certainly after that, and once we are comfortable with the turnaround and we have got a process that is acceptable to everyone involved, Transport Canada, NAV CANADA, you know, the Lobster Fisheries Association, those kinds of things, and we can modify that schedule to increase tempo, we would certainly, you know, be happy to look at that. And I think the market is certainly there for it, from what I am getting.
Marc Boucher: Okay. According to a recent news report in the Port Hawkesbury Reporter, a local paper in Nova Scotia, you’ve secured commitments of nearly four hundred million dollars for your launch services. Is that an accurate number and how many payloads does that represent?
Steve Matier: That was a four hundred million Canadian, just to make sure the math is straight there. And it is, you know, more than a few letters of intent from launch customers with multiple missions in three of the four cases.
Marc Boucher: Okay. I don’t — and, of course, you can’t reveal any of those potential customers at this point, right?
Steve Matier: As much as I would love to.
Marc Boucher: But maybe I can ask you some roundabout questions. Are any of those commitments from Canada?
Steve Matier: There are a couple that are very close to crossing the line with respect to Canada, but the other ones are international.
Marc Boucher: International, so …
Steve Matier: Not just the US.
Marc Boucher: Not just the US. Oh, okay. All right. Well, that’s interesting. Okay, so this is the, sort of the crux of the business case moving forward, you know, once you get regulatory approval, should all that come to fruition the way you want to, you still need to have the funds to make the project viable. Will you have the funds to begin construction and move forward?
Steve Matier: At this point, the prospects are really positive towards that end. It is working together very well right now from an equity, an infrastructure, and classic loan to, you know, across the board. We do have a lot of key pieces that are in place. We have been through seed funding and bridge funding and closing series A and series B. Parti cipants will likely be the same as series A, so it’s looking extremely positive for us from that financial perspective, yes.
Marc Boucher: So you’ve done a series A?
Steve Matier: We are in the final closing.
Marc Boucher: You are in the final closing. So one of the things that some people do bring up as a comparison is the failed venture of trying to get the Cyclone launched from Brazil. What’s the differences between this project and that project, and why does this one have a greater potential for success?
Steve Matier: This project is a one hundred percent commercial project. That’s probably the key piece to it. The previous one was a joint venture between two governments, with a 50/50 joint venture where one is providing a spaceport and the other is providing a rocket. Not getting into the, you know, the back-and-forth of how that actually ended up playing through, or the responsibility assignment therein, I wouldn’t want to, you know, get into that kind of discussion.
The reality is as a commercial project we are under finalizing direct contracts with Yuzhnoye and Yuzhmash as suppliers to us. This is exactly the way it is operating very well for Orbital ATK with the Antares first stage. That is manufactured by Yuzhmash and designed by Yuzhnoye, and it’s modelling after that same customer/supplier relationship. It’s not in a government-to-government project.
Marc Boucher: Okay. So that does make a very clear distinction between the two projects. And at this point, you know, as a fully commercial project, there is no Canadian government involvement in the project. But would you think that going down the road, should the commercial business take off, that there might be some Canadian interest, government interest in actually contracting you for use of the facility?
Steve Matier: Oh, yes, absolutely. You know, some of the conversations that we’ve had dealing with some government entities do involve them potentially buying the services and, you know, getting some payload space for themselves and their missions. That is certainly the case, yes.
Marc Boucher: So I just have a couple of last questions here. Since the company started up and became publicly known, you had a little transition in your senior management. John Isella, who was the CEO and VP for sales and marketing has left the company. Can you tell us why that came about?
Steve Matier: Well, there are a number of pieces that fit into that change in the leadership, but what I can tell you, you know, openly is that, you know, John is absolutely still supporting the project. He is, you know, working directly for Yuzhnoye, as he has been for a number of years. And, you know, when we were out there in April — or, I’m sorry, in August — he was a part of any and all of the meetings that we were having with Yuzhnoye, and helping us to put together these memorandum of cooperation. He has been instrumental in the project and grateful for that.
You know, so the change is maybe more associated with assignment than it is anything else. He is a Yuzhnoye, under contract by Yuzhnoye which, you know, has its own implications if he is going to be a CEO for MLS. And then we do have a whole regime associated with ITAR and export control and data and everything else. And where he may be with regard to that, living in Ukraine, and, you know, working with the State Department in the US, and the Global Affairs in Canada, and how that relationship could play out.
Marc Boucher: Is he or was he a shareholder?
Steve Matier: Yes.
Marc Boucher: So is he still a shareholder then?
Steve Matier: He is still a shareholder.
Marc Boucher: Oh, okay. So with respect to beginning construction in May of next year, what kind of new employment activity will this do for the community?
Steve Matier: Just in recent meetings with — we have, by the way, we have selected a construction management company for this project, and it’s Lindsay Construction, the largest construction firm in Atlantic Canada. Extremely positive step forward for us with them being involved and helping us through this process. I have been through it here in the US a number of times, but I don’t have my Canadian regulatory notebook out. And so having them jump in and help us with this part of the project is a critical go forward. We have had meetings with them and some A&E firms in kicking off designs, just recently speaking about that kind of stuff.
You know, expectation is going to be 100-plus people during construction, you know, rising and falling around various aspects of the construction project that will be coming from that local area as much as possible.
In the longer term operations, and we’re also looking at setting up the operations contract where we’re setting up, you know, a protective services contractor, or a general services contractor, so we can have those be companies that are providing services out of Atlantic Canada and Nova Scotia.
So, you know, there is really positive employment for that, from that perspective. It can draw from the area of Canso or Hazel Hill, Little Dover, certainly Guysborough, Antigonish, and Port Hawkesbury are going to be obvious places that people will be commuting from potentially.
But a great deal of it, I mean, when you look at what it takes to operate a launch site, you know, it’s not a bunch of scientists geeky guys. It is really, you know, people with wrenches and screwdrivers and the like. And the Nova Scotia Community College, when you look at their degree program or their training programs, they fit extremely well for operations of facilities like this. And I know of what I speak from having done it for, at a NASA facility for 16 years. Operating facilities like that is, you know, bread and butter for me. I know how to make that part of it work really well. So I know what the skills are that we need for this thing, and I know what the skills are there in the community. So I totally see it all happening from there and not being imported.
Marc Boucher: Well, you have given me some great information. It’s great to hear that the project is moving forward. Look forward to hearing from you again and to see how the project goes forward in 2018.
So I’d like to thank you for being on the SpaceQ podcast and hopefully you’ll consider being a guest on a future show.
Steve Matier: I’d be glad to. Thank you for the invitation.
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